End of the line: A R.I. business defines a family and then fractures it

By Lynn Arditi
Published July 7, 2002

 A FINAL GOOD-BYE - Maria Fontes, right, of Lincoln, and Lucy Amaral, of East Providence, leave the former Nyman Manufacturing Co., in East Providence Wednesday, their last day of work.
A FINAL GOOD-BYE – Maria Fontes, right, of Lincoln, and Lucy Amaral, of East Providence, leave the former Nyman Manufacturing Co., in East Providence Wednesday, their last day of work.

The summer house that Walfred Nyman built for his family on Harbour Island sits on a hill with a million-dollar view. When the wind picks up, the movement of the tide on Salt Pond makes you feel you’re at sea, drifting.

Elizabeth Nyman says her husband built the house, in the 1950s, “to keep the family together.”

But in the 13 years since “Pop Pop” died – his ashes sprinkled near the buoy that always guided them home the family has come apart.

There are no more gatherings in Narragansett no more cookouts with grandchildren racing to the water’s edge. No more trips on The Liz, motoring to Block Island.

Today, the four children of Walfred and Elizabeth Nyman are never all together except with a lawyer.

“You know, it wasn’t always bad,” says Judith Nyman Lawton, 62, her voice quavering. “We were a happy family .. I thought.”

And a Rhode Island family business.

For three generations, “Nyman” was synonymous with paper and plastic tableware Del’s Lemonade, Friendly’s, Coca-Cola, and Budweiser were some of the names on cups made by the Nyman Manufacturing Co.

Founded in 1936 by Walfred’s father, a Swedish immigrant named John Nyman, the Providence machine shop became a 338,000-square-foot factory in East Providence, employing more than 400 people.

Then, in 1997, eight years after Walfred’s death, his two sons sold the business and made millions.

Family loyalties were shaken; suspicion grew. Relations between the Nyman brothers and their two sisters became stiff, icy, and then broke off.

And now there are lawsuits.

EVEN IN this era of globalization, family-owned companies endure on the American business landscape. About 40 percent of all Fortune 500 companies including even such big, publicly traded ones as Wal-Mart and Ford are technically family-owned.

That seems like a lot, yet only a third of all family businesses survive the passage from first generation to second; by the third generation, the survival rate is about 5 percent, says William O’Hara, executive director of Bryant College’s Institute for Family Enterprise.

Sadly, Nyman Manufacturing was no exception.

By the end of the month, the last of the 190 machine operators, packers, and maintenance workers some of whom were hired by Walfred Nyman will have swiped their plastic ID cards at the electronic time clock for the last time. The machines many of which were built by Nyman and his brother will go quiet. The extruders, injection molders, and thermoformers will be trucked to plants in Ohio and Michigan.

Left behind will be the blue plaque on the door to Walfred Nyman’s office; an aerial photo of the factory hanging prominently in the hall; and a photo album kept tucked away by Nyman’s grandson Andrew the last Nyman to work at the factory.

In one yellowed color snapshot, a silver-haired Walfred, shirt sleeves rolled up to his elbows, bends over a wax-cup machine, flashlight in hand, smiling.

WALFRED AND Elizabeth Nyman raised their four children in a traditional 1950s way.

Home was a three-bedroom yellow Colonial on a quiet street in Warwick’s Gaspee Plateau, surrounded by gardens. While Walfred, with his brother, ran the family business, Elizabeth tended to the house and the children: Robert Crawford; Judith Ann; Kenneth John; and Beverly Jean.

Elizabeth Lutey Nyman was always a “proper lady,” says daughter Judith. Making sure the children attended Edgewood Congregational United Church of Christ and studied the piano, “she wanted to educate us and groom us and polish us for the world.”

Her husband, who had not gone past high school, also wanted a good education for his children. “Show me a man who can read!” he’d declare. But his ambitions for his children regarding the family business involved only his sons most of all his first, Robert.

In the 1954 Moses Brown yearbook, Robert appears tall and handsome like all the Nyman children, but something about him really stands out. With dark hair, a strong jaw, deep-set eyes, and an athletic build, he looks like a young movie star. And there is a composure: head angled away from the camera, lips parted in a slight smile, eyes focused on some point in the distance.

To Judie, Bob was the big brother to be admired from afar. She once watched him sit, unflinching, as their father removed stitches from his face. She marveled at his bravery.

The girl’s greatest admiration, though, was for their father. He was a self-taught businessman with a strong work ethic and a jovial spirit.

He once took young Judie – not one of the boys! for a ride on his motorcycle. On a summer evening the girl placed her slender arms around her father’s waist as he gunned the engine. The wind rang in her ears and dogs barked and chased them, but Judie wasn’t afraid. After all, she was with her father.

“Never afraid with him,” she says now, as softly as a breeze. “Never, never, never . . .”

THE FAMILY business defined the family.

As one grandchild, Marsha Lawton Daras, now puts it: “This company is what made this whole family. That’s where everybody got their little boats and their beach houses and their colleges. . . . When they thought their children needed a vacation from their children, my grandparents would just pay. They did it out of love.”

And for Walfred and Elizabeth’s sons, of course, the family business was destiny.

They came to it straight from college Robert from the University of New Hampshire; Kenneth from New England College, also in New Hampshire.

Walfred believed running the factory meant knowing the machines, so he put “the boys” right to work. Every Saturday morning there they were cleaning the machinery that Walfred and Uncle Ralph had built. With gloves, goggles, and pressurized air guns, the young Nymans removed the heavy glue rolls and soaked them in cleaning solvent. They scrubbed the greasy gears with a wire brush.

Do the job and do it right was the way Walfred Nyman wanted it.

ROBERT Nyman, 66, has declined to be interviewed for this story; he has also declined to respond to written questions submitted to him through his lawyer. His words like those of his brother, Kenneth Nyman, 57, and his sister Beverly Nyman Kiepler, 51 are drawn from legal testimony, correspondence, depositions, and other court documents.

In a mere six years after starting at Nyman Manufacturing, Robert Nyman became president, in 1964.

At about that time, he later said, in testimony, “my father said that I had become involved enough in the company so that he thought I should have some stock in the company.”

But Walfred Nyman was not giving his son any stock. Robert would have to buy it.

“I never received shares from my father,” he said.

Says sister Judith Nyman Lawton: “Robert really resented that in his later years.”

By contrast, Walfred Nyman did make gifts of stock to his three other children.

The four young Nymans were following the paths laid out for them in childhood: the sons’ to the family business; the daughters’, elsewhere.

Judith earned a degree in secretarial sciences at Bryant College and married Thomas Lawton. Her father hired him to work in inventory control; over the years Lawton worked his way up to production manager.

Beverly, the youngest Nyman, became an elementary-school teacher and married an employee on the business side of Nyman Manufacturing. (They later divorced and she remarried.)

Judith Lawton says she never resented that it was only the Nyman sons who had been chosen to run the family business. “I wanted to work there forever,” she says, “but my dad didn’t want me to work never mind at the company. I guess it was sort of old-school.”

Her father, she says, always “looked up to” Robert he “just thought he was so special.”

The divergent paths taken by the Nyman siblings led to divergent lives. Judith and Tom Lawton, for example, raised eight children, three of them foster children whom they adopted, and during those years money was tight.

“We lived a different lifestyle than Uncle Bob and Uncle Ken,” says the Lawtons’ daughter Marsha Lawton Daras. “They’d always drive up in beautiful cars . . . we had big vans.”

BY THE 1970s, Nyman Manufacturing had moved from Providence into a converted warehouse in East Providence. Robert and Kenneth Nyman got offices in there modeled front section, near the sales and marketing departments. Their father and their uncle Ralph Nyman the two owners worked in the back of the plant, near the machine shop.

Walfred Nyman was most at home on the production floor, says son-in-law Thomas Lawton. There, the chief executive officer would chat with the workers and tinker with the cup machines.

“Tom, come out I want to show you a machine,” Walfred would say to Lawton, as Lawton recalls. “And he would get down on his hands and knees and take a flashlight and flash it. ‘See that powder there? That’s rust. Make sure you pass it on to Bob or Ken.’ ”

When a heart ailment hindered his walking, Walfred cruised the shop floor in a motorized cart.

The father’s devotion to the day-to-day running of the factory caused some friction with his older son.

“I could hear arguments,” says Lawton. “Tom,” Walfred would say to Lawton, “I don’t know what I’m going to do with my boys. They don’t listen. . . .’ ”

Lawton says he’d let his father-in-law “vent.” But he rarely offered opinions.

One Easter at the Nymans’, says Lawton, “we were all drinking and having a good time, and I turned to Wally and said, ‘I don’t think Bob is running the company the right way . . .’

“Wally turned around and slapped me. ‘Bob is trying,’ he said.”

There were some lines within the Nyman family, Tom Lawton learned, that you did not cross.

THE PASSING of Nyman Manufacturing to the third generation began in 1971, when Robert and Kenneth first acquired voting stock. Ralph Nyman had died and bequeathed his shares to his two nephews.

Unlike publicly traded companies, in which many shareholders usually have the right to vote, the privately owned Nyman Manufacturing gave that right only to holders of voting stock: originally, Ralph and Walfred, who each owned half. Even their sister Magda, the company’s office manager, held only non-voting stock.

So after Ralph’s death, Walfred owned one half of the voting stock and his sons owned the other.

But that changed in 1989. One August morning Walfred Nyman was about to get into his station wagon, to go to work, when he collapsed outside the house on Harbour Island. At 76, he was dead.

His family memorialized him in individual ways. One grandchild framed the stock certificate he had given her; another displayed his fisherman’s cap and anchor-buckle belt next to her desk.

His wife, for whom he had named his beloved boat, sold The Liz and with the money took all the children and their families 23 people to Bermuda.

What did the father leave to his family?

To his wife, Elizabeth, Walfred Nyman bequeathed all of his 750 voting shares half the company’s total. Had she not survived him, they would have gone to his two daughters.

To both his daughters and his sons, he left 2,438 non-voting shares, to be divided equally.

But the value of all that stock had dwindled. When Walfred Nyman died, the company was in trouble.

DURING the 1980s, Nyman Manufacturing had been reporting losses, until by 1989 they amounted to $3.4 million.

Poor management of production scheduling and inventory were part of the problem, Robert Nyman later testified, as were changes in technology and the industry. The growing competition from national corporations, with their economies of scale, put the Rhode Island company at a disadvantage.

By 1991, when the taxes on Walfred Nyman’s estate came due, Nyman Manufacturing’s voting shares were valued at $115, and its non-voting shares at $104a third of their values during the boom years of the ’70s. To cover the estate taxes and fees, nearly half of all the shares in his estate had to be sold back to the company. And these included all of Walfred’s voting shares.

So half of all the company’s voting stock wound up in the company treasury.

The company found itself struggling so hard that it could not even keep up with machine maintenance. Some of the cup injection molds were producing only four, rather than six, cups a shot.

Robert and Kenneth Nyman with salaries of $243,977 and $141,849, respectively took pay cuts. And they personally guaranteed $1 million of the company’s debt.

Judith Nyman Lawton had finally achieved her dream of working for the company; she was a human-resources executive secretary, with a salary of $25,126. Her husband, Thomas, was then earning $32,301 as a third-shift machine oiler.

That spring, Robert Nyman hired a friend with expertise in rescuing companies to help make Nyman Manufacturing profitable again. If it worked, Keith Johnson was promised part ownership.

The company then sold its warehouse and distribution center in Georgia; sold some of its machinery; froze salaries; and laid off 30 to 40 salaried employees.

Judith Lawton’s job was eliminated, and she was transferred to a lower-paying secretary-assistant slot, in purchasing.

“The attitude around here stinks,” she wrote her sister in February 1995, “but upper management always appears optimistic (they should be, with their salaries!).”

The rescue strategy paid off. In 1995 Nyman Manufacturing reported a $1.6-million profit.

THAT YEAR, the Nyman brothers and Keith Johnson decided that the company should “eliminate any shareholders who are not active in day-to-day operations of the company” (as it was stated in court records), by buying back their non-voting stock.

And by May of 1996 the Nyman sisters and their families had received letters offering them the chance to sell their stock to the company, for $200 per share.

Judith Nyman Lawton jumped at the offer.

After so many years of losses, she said later, in testimony, she was thrilled to learn that her stock might be worth something. She said she did not consult a financial adviser, nor did she ask to see any of the company’s financial reports.

“It sounds like a great deal,” Lawton said she told her brother, Robert, when he called to make sure she had received the offer letter. “What do you think?”

Lawton said her brother told her that although the company had been losing money, it had been able to borrow enough to buy back stocks, and “he thought it was a once-in-a-lifetime opportunity.”

Said Judith Lawton: “I trusted him.”

Robert Nyman said in a deposition that he didn’t recall the conversation.

Over a 14-month period, the company bought back the non-voting shares in the estate of the late Magda Nyman Burt; the shares owned by Judith and Thomas Lawton and their children; and the shares owned by the children of Robert and Kenneth Nyman.

Each time the company repurchased some stock, the two brothers and their partner then granted themselves options to buy the same number of shares for themselves.

When the buy-back was completed, in June of 1996, the brothers and their partner either owned or had options to buy more than three-quarters of all the company’s stock. And 100 percent of the voting stock was owned by the brothers.

Only the younger Nyman sister, Beverly Nyman Kiepler, and her daughter, Kristen Branch, had declined to sell back their stock. Nor would Kiepler grant permission to sell the remaining shares in her father’s trust, of which she was a beneficiary.

“It didn’t make sense to me they’re businessmen,” she later said, in testimony, of her brothers and their partner. “If they wanted to keep something, there’s a reason for it.”

In Robert Nyman’s view, the reason was simple. “I worked at that company for 40 years and carried it through some very difficult times,” he said, in testimony. “I felt that my brother and I were making significant contributions that we had saved the company.”

THE LAST Nyman family event attended by all four siblings was in July 1997: a christening at the Harbour Island house.

This was the house that Walfred had built between the houses of Brother Ralph and Sister Magda for his family. The two newest members were the focus on this day, which, as always, had been planned with care. On the back lawn, framed by the water, stood an arch laced with white flowers; a big yellow tent provided shade; balloons added splashes of yellow and blue.

The Rev. Robert Mitchell blessed the babies with salt water in honor of their nautical great-grandfather. Then all the children ran barefoot into the sandy cove, just beyond the dock where Pop Pop had always tied up his boat.

The grownups chatted. At one point Judith Lawton overheard a niece, who worked at the factory, say something about a job interview. Lawton, who had left her job at Nyman, asked her why she was job hunting. The niece said that the company was being sold.

Lawton was shocked.

“I just always believed that the company would exist,” she said later, in testimony. “I thought it would go from this generation to the next, to the next.”

ON SEPT. 29, 1997, Nyman Manufacturing Co. was sold to a Dutch company, Royal Packaging Industries Van Leer, for $28.16 million.

Robert Nyman received $8.9 million; Kenneth Nyman, $7.2 million; their partner, Keith Johnson, $5.1 million.

Beverly Nyman Kiepler, the sister who had held on to her shares, received $962,078; her daughter, also still holding shares, received $205,087.

The value of the Nyman stock at the sale was later estimated by U.S. District Judge Ernest C. Torres to have been “8 to 10 times” the value of what the Lawton family had received for their shares upon selling them back to the company, 14 months earlier.

(In 1999, the company would again be sold, this time to its current owner, the Finnish conglomerate Huhtamaki.)

IN TWO related lawsuits, filed in May 1998 in U.S. District Court, Providence, the Lawton and Kiepler families accused Robert and Kenneth Nyman and their partner, Keith Johnson, of “enriching themselves” at their expense.

The Lawtons, who had received $183,400 for their shares, charged that the brothers and Johnson had caused them to sell their stock for less than what it was worth, by misrepresenting the stock’s value.

Among the more stinging accusations: “manipulation,” “deceptive conduct,” and “pretending loyalty,” while the partners “secretly intended to profit” by buying the Lawtons’ shares.

At the trial of the Lawtons’ case, in February and March of 2001, Robert Nyman said: “The entire transaction was an accommodation for my sister [Judith]. The only reason we went ahead with the family, extended-family members, was so that we would be fair to all. I did not want to have family members coming back and telling me that we had favored someone over another. It was something that I was proud to be able to do, and I felt that my father would have applauded.”

Last Jan. 17, U.S. District Judge Ernest C. Torres ruled that the Nyman brothers and their partner had breached their “fiduciary duties” to their sisters and their sisters’ families, because they had failed to disclose “that the company soon could be sold for much more” than the value reflected in the price they paid the Lawtons for their stock.

Judge Torres also ruled that the partners’ purchase of stock from the company treasury had reduced the relative share of the Kieplers’ ownership, so that the Kieplers received less than they should have when the company was sold.

As for the $200 per share that the Lawtons had received for their stock, Judge Torres cited the testimony of an expert witness who deemed the stock’s fair market value at the time of the buy-back to have been $303 per share.

Nevertheless, the judge ruled that the actions of the brothers and their partner had not risen to the level of deception and manipulation.

The judge ordered the brothers and their partner to pay $2.09 million to the Lawtons, including $1.3 million specifically to Judith Nyman Lawton; $472,681 to Beverly Nyman Kiepler; and $100,762 to her daughter, Kristen Branch. Interest was also to be paid.

The Nyman brothers and Keith Johnson are appealing the ruling.

THERE WERE no outbursts no tearful confrontations. The emotional break between the Nyman siblings was muted.

The family that had carefully maintained traditions linen-and-sterling Christmas dinners at Judith’s, in western Coventry; pool parties at Kenneth’s, in Cumberland; a wedding reception at Robert’s, in Little Compton no longer gathered.

“Every affair, like a wedding or a baptism, brought them all together,” says the Rev. Robert Mitchell. “They were always there for each other.”

Today, the relationship of Judith and her older brother is contained in a court file. Among the business letters is one addressed to Judith; it is signed “Love you, Bob.”

Answering a knock one recent morning at the door of a historic Cooke Street house, on Providence’s East Side, a man in blue Oxford shirt, khaki shorts, and glasses appears.

He bears an unmistakable resemblance to the handsome boy in the Moses Brown yearbook. Only the dark hair is now white.

Robert Nyman politely declines a request for an interview for this story.

“No,” he says, “I think I really don’t want to be a part of it. Thank you very much.” And the door closes.

ON A CHILLY spring afternoon on Harbour Island, a gold Cadillac with a tiny American flag on the antenna pulls into the driveway of the Nyman house.

A woman eases herself out of the driver’s seat, with a shopping bag dangling on her forearm. Age has slowed her movements, but she is still very tall, and stands as straight as a statue.

Elizabeth Nyman is now 88, and has an ailing heart.

Talk of her children’s lawsuits puts her on edge, says her daughter Judith Lawton.

Even taller than her mother, and thin like her, Lawton has blonde hair and tanned skin. She wears a black pantsuit with shiny buttons; her nails are long and polished a pearl white.

Lawton keeps a watchful eye on her mother.

Elizabeth Nyman says of her family’s breakup: “It’s been hard.” She refers to it as “arguing.”

“Disagreeing,” corrects her daughter.

Out of her mother’s earshot, Lawton says: “She’s waiting for it, quote, to be over, so life gets back to normal. And it’s never going to happen. Her perfect family is not perfect.”

Elizabeth Nyman walks into the house, passing child-sized sweaters hand-knitted in pale yellow, pearl, and gray; and a steel grinder it was what her husband, Walfred, had used to sharpen his tools.

She pauses at the entrance to a small room, clutching the door frame as she waits for her breath to return.

The room has few furnishings: a desk, a small television set, an old telephone.

But the walls are covered: a framed newspaper clipping here; a company proclamation honoring 50 years of service . . . And everywhere, photographs.

In one, a painting-sized portrait, a dark-haired businessman gazes out proudly. In a corner of the frame there is a card: Walfred M. Nyman, 11/28/12 – 8/15/89 Founder and Chairman of Nyman Mfg. Co.

Elizabeth Nyman’s eyes trace the contents of the room. Then, in a voice soft and sadly distant, she says, “It’s just the way he left everything.”

* * *

* * *

* A FINAL GOOD-BYE – Maria Fontes, right, of Lincoln, and Lucy Amaral, of East Providence, leave the former Nyman Manufacturing Co., in East Providence Wednesday, their last day of work. Below, Elizabeth Nyman and her late husband, Walfred, pose in the 1940s with two of their children, Judith, left, and Robert.

* A FINAL GOOD-BYE – Maria Fontes, right, of Lincoln, and Lucy Amaral, of East Providence, leave the former Nyman Manufacturing Co., in East Providence Wednesday, their last day of work. Below, Elizabeth Nyman and her late husband, Walfred, pose in the 1940s with two of their children, Judith, left, and Robert.


* FAMILY RETREAT: Walfred Nyman built a summer house on Harbour Island, in Narragansett, where three generations of the family used to gather. The last family event at the house attended by all four siblings was a christening in 1997.


* HANDS-ON EXECUTIVE: The late Walfred Nyman, former president of the Nyman Manufacturing Co. in East Providence, checks a wax cup machine.


* MEMORIES: “We were a happy family . . . I thought,” says Judith Nyman Lawton, who joined in a lawsuit against her brothers over the sale of Nyman company stock.


* KENNETH J. NYMAN helped his older brother, Robert, run the family business and received $7.2 million when it was sold.


* ROBERT C. NYMAN, former president of Nyman Manufacturing, received $8.9 million when the company was sold.


* IN THE BEGINNING: An old family photo shows paperware manufacturing machinery at the former Nyman Manufacturing Co.


* LAST SHIFT: Factory workers carry away bags of plastic plates, which they were given upon leaving the former Nyman plant Wednesday.